CVS Caremark Settles Prescription Suit
Woonsocket, R.I. CVS Caremark has agreed to a settlement in relation to a multi-state consumer protection investigation of its pharmacy benefits manager AdvancePCS that began in 2004. The investigation alleged that Caremark urged doctors to switch patient medications in order to save money, but did not let doctors know Caremark would keep the savings, and patients and their health plans might pay more.
CVS Caremark said that its AdvancePCS (now known as CaremarkPCS) and Caremark subsidiaries have entered into a settlement agreement and consent order with 28 states and the District of Columbia. In entering the settlement, they have expressly denied any and all allegations, and there has been no finding of wrongdoing or inappropriate business conduct on their part.
The company has agreed to pay $12 million in settlement on behalf of legacy AdvancePCS, $10 million in settlement on behalf of legacy Caremark, $16.5 million in state investigative costs and up to $2.5 million as reimbursement for certain medical tests.
The mutually agreed consent order requires AdvancePCS and Caremark to maintain certain PBM business practices and will not result in significant changes to current business practices.
Senate looks to block retail banking ventures
WASHINGTON Retailers looking to own banks face a new roadblock, now that the Senate Banking, Housing and Urban Affairs Committee voted to approve a bill that would limit the type of businesses that could own industrial loan companies.
According to reports, the committee voted 11 to 10 to draft a bill presented by Chairman Christopher Dodd, D-Conn., that would prohibit non-financial companies from owning banks. The deal would not affect companies, that already own industrial loan companies, however they would be subject to additional regulation, reports said.
The vote was divided amongst democrats and republicans, with republicans opposed to the bill. Sen. Robert Bennet, R-Utah, reportedly stated that the banks are needed to supply credit to niche markets, and that there have been no issues with existing commercially owned international loan companies.
Liz Claiborne cautious on 4Q estimates
NEW YORK Liz Claiborne today pre-announced an expected earnings loss of 25 cents to 35 cents per share for the year 2007, compared to diluted earnings per share of $2.46 for the full year 2006. The company added that adjusted diluted EPS for the year 2007 are currently estimated to be in the range of $1.25 to $1.35, compared to previous adjusted diluted EPS guidance of $1.70 to $1.80. Adjusted diluted EPS were $2.99 for the year 2006.
Liz Claiborne reported that net sales for the year 2007 were approximately $4.6 billion, a decrease of 1.4% from the comparable 2006 year. According to the company, the predicted results reflect continued weakness in the partnered brands segment, which includes the brands under strategic review, partially offset by positive performance in the direct brands segment.
For the fourth quarter of 2007, the company expects to report a loss per share of 90 cents to $1.00, compared to diluted EPS of 71 cents for the fourth quarter 2006. Adjusted diluted EPS for the fourth quarter of 2007 is currently estimated to be in the range of 15 cents to 25 cents compared to adjusted diluted EPS of 94 cents for the fourth quarter 2006. Net sales for the fourth quarter of 2007 were approximately $1.2 billion, a decrease of 3% from the comparable 2006 period.
William McComb, ceo of Liz Claiborne, said: “While 2007 marked a very difficult period, we see the fundamentals in this company heading in the right direction. We are steadfast in our commitment to rebase our costs, to invest in design and retail capabilities, and to complete our strategic review by the end of the first quarter. The conservative view we are taking in our 2008 guidance-specifically around our partnered brands performance-is only prudent given the challenging retail environment.”